California Congressman Alleges CAFE Benefits Bailout Recipients

Derek Kreindler
by Derek Kreindler
california congressman alleges cafe benefits bailout recipients

Bloomberg is reporting that House Republicans, led by California Congressman Darrell Issa, are set to produce a report that heavily criticizes CAFE as a politicized move designed to curry favor with bailed out auto makers and environmental groups.

Issa called CAFE

“a raw political process designed to appease environmental extremists…The impact of this process will not be immediate but will be felt by manufacturers forced to make, dealers forced to sell, and consumers forced to purchase far different, more expensive and less safe vehicles,”

Singled out in particular by Issa were the influence exerted by California (which can write its own rules if it is unsatisfied with the federal government’s own rules) and environmental groups. The Detroit News reports that Toyota, along with other foreign automakers, were unhappy with the deal, and they perceived favoritism towards the home team.

Automotive News, quoting the paper, recounts how Toyota Motor Sales U.S. head Jim Lentz told Ron Bloom, then the White House chief negotiator, how Toyota felt.

“Japan is angry. Feel like they have been screwed,” according to handwritten notes from Toyota, the News reported today. The paper said Toyota wanted credits for hybrid vehicles — similar to credits that were extended to natural gas, flex-fuel and electric vehicles — and wanted more flexibility to use car credits for meeting truck standards.”

Another sticking point for Toyota was the slippery definition of what exactly constitutes a truck. The Big Three had been using this as a way to shift vehicles, like the Chrysler PT Cruiser, into the “truck” column to help bring down their fuel economy averages on the truck side.

Toyota also argued that the definition of a full-sized pickup truck — a stronghold of Detroit automakers for years — had been written to exclude the Toyota Tundra. Lentz said the deal was an “old Detroit tactic. It may hurt me, but it hurts my competitors more,” Toyota’s notes said, the News reported. But the White House was eager for Toyota to support the deal. “It looks bad for me and bad for you if Toyota is not there,” Bloom told Lentz at one point during the process, the News reported.

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  • Rnc Rnc on Aug 11, 2012

    It's not running out, it's cost of current supply (20 years ago 3/5th's of the world's population was riding bikes (India and China)or public transit, (the soviet block countries weren't known for mass-car ownership, but SU was 2nd or 3rd largest exporter of Oil at the time)), those 3 billion people are driving or want to drive soon. Oil was around $10/barrel in 1991, this was saudi crude, easiest to get at in the world (What is $/barrel now during a world recession?). So that leads to next part of problem, cost of future demand as population continues to increase at rate that earth can't sustain (China's one child was more than compensated by India's 9 or 10 child policy) and this population boom is taking place in east asia, not some rat holes (sorry for use of term, but genocide only seems to matter to the world when it takes place in europe or a country with resources we was) in africa, these people can and will buy cars.

  • Bd2 Bd2 on Aug 15, 2012

    Pretty funny that a right-wing Republican is siding with Toyota and complaining about CAFE standards not going far enough for light-trucks. Also pretty funny about Toyota complainging about domestic "homerism." The domestics have to meet the same CAFE standards as Toyota when it comes to cars and light trucks; it's not their fault if Toyota doesn't sell as many light trucks.

  • Probert There's something wrong with that chart. The 9 month numbers for Tesla, in the chart, are closer to Tesla's Q3 numbers. They delivered 343,830 cars in q3 and YoY it is a 40% increase. They sold 363,830 but deliveries were slowed at the end of the quarter - no cars in inventory. For the past 9 months the total sold is 929,910 . So very good performance considering a major shutdown for about a month in China (Covid, factory revamp). Not sure if the chart is also inaccurate for other makers.
  • ToolGuy "...overall length grew only fractionally, from 187.6” in 1994 to 198.7” in 1995."Something very wrong with that sentence. I believe you just overstated the length by 11 inches.
  • ToolGuy There is no level of markup on the Jeep Wrangler which would not be justified or would make it any less desirable [perfectly inelastic demand, i.e., 'I want one']. Source: My 21-year-old daughter.
  • ToolGuy Strong performance from Fiat.
  • Inside Looking Out GM is like America, it does the right thing only after trying everything else.  As General Motors goes, so goes America.
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